Toronto Stock Exchange:
G
New York Stock Exchange: GG
(All Amounts in $US unless stated otherwise)
VANCOUVER, Jan. 9, 2012
/PRNewswire/ - GOLDCORP INC. (TSX: G, NYSE: GG) today
announced 2011 gold production and provided production and cash
cost guidance for 2012 and the five-year period ending 2016.
Highlights
- Total 2011 gold production of 2.51 million ounces.
- Fourth quarter 2011 gold production totaled 687,900
ounces.
- Total 2012 gold production forecast of 2.6 million ounces,
including first production from Pueblo Viejo.
- Five-year gold production forecast increase of 70% to 4.2
million ounces in 2016.
- Total cash costs expected to remain below $400 per ounce over the next five years.
- Decision to commence construction of El Morro; first production
expected in 2017.
Goldcorp's year-end financial statements are
scheduled to be released on February 15,
2012. The final calculation of operating costs has not yet
been completed, but total cash costs(1) for all of 2011
are expected to be approximately $220
per ounce of gold on a by-product basis and approximately
$530 per ounce of gold on a
co-product basis, meeting guidance on both measures.
The Company ends the year with approximately $1.7 billion in cash.
"Very strong gold production in the fourth
quarter of 2011 underscores the overall high quality of our mine
portfolio," said Chuck Jeannes, President and Chief Executive
Officer. "Peñasquito met its production target and continued to
emerge as the linchpin of our asset base in 2011, with strong
operating cash flow in just its first full year of
production. Also in Mexico, the Los Filos mine achieved
record production of 336,500 ounces while continuing with its
excellent safety performance. Red Lake in 2011 remained the
anchor of our overall gold production at very low cash costs while
Porcupine and Musselwhite mines in Ontario provided stable
production and exciting exploration results. In Guatemala,
the last year of open pit mining in the highest grade portion of
the pit at Marlin resulted in record gold production of 382,400
ounces.
"Our forecast gold production of 2.6 million
ounces in 2012 will be driven by another strong year throughout the
portfolio, while significantly increased production at Peñasquito
will be offset by lower production at Marlin as the mine
transitions to 100% underground mining. Year over year growth in
our overall production target comes from new gold production from
the Pueblo Viejo joint venture in the Dominican Republic but at a
significantly reduced level due to previously reported project
delays. Consistent production levels at other mines
throughout the portfolio will create a stable foundation for the
years ahead.
"We begin 2012 with the primary drivers of
Goldcorp's outstanding growth profile well-positioned to contribute
steady, regular growth in gold production over the next several
years. During 2011, exploration success led to significantly
expanded production expectations at Cerro Negro in Argentina and
Éléonore in Quebec. Looking beyond our five-year 70% growth
forecast, the decision to proceed with construction of the El Morro
project in Chile ensures that another major source of new
production will come on stream to supplement our growth profile
over the longer term.
"Goldcorp's increasing production profile and
balance sheet strength affords us the flexibility to fund our
operations and projects internally while also returning value to
shareholders in the form of increasing dividends. This
combination of strong, achievable growth and a meaningful dividend
creates a highly differentiated investment proposition in the gold
industry and a key competitive advantage for Goldcorp as we begin
2012."
Goldcorp also provided cash cost guidance for
the 2012 year. The Company expects to produce approximately
2.6 million ounces of gold at a total cash cost of $250 to $275 per ounce on a by-product basis and
$550 to $600 per ounce on a
co-product basis. Forecast 2012 silver production of
approximately 34 million ounces (including approximately 26 million
ounces at Peñasquito) would place Goldcorp among the largest silver
producers in the world. Copper production is forecast at
approximately 110 million pounds; zinc production is expected to be
approximately 400 million pounds and lead production is forecast at
approximately 180 million pounds.
Assumptions used to forecast total cash costs
for 2012 include: $1,600 per
ounce for gold; by-product metals prices of $34.00 per ounce silver; $3.50 per pound copper; $0.90 per pound zinc; $0.90 per pound lead, an oil price of
$95 per barrel and the Canadian
dollar and Mexican peso at $1.00 and
$13.00 respectively to the US
dollar. The Company continues to evaluate opportunities to
contain input costs and minimize foreign exchange risk through the
hedging of both diesel and currencies. For year-over-year
comparative purposes, using actual metals prices and foreign
exchange rates realized in 2011, Goldcorp's by-product cash costs
for 2012 would be forecast at $235
per ounce of gold. Mine-by-mine actual 2011 gold production
results and estimated 2012 gold production are as follows:
Mine |
2011
Production |
2012
Forecast |
Red Lake |
622,000 |
650,000 |
Peñasquito |
254,100 |
425,000 |
Los Filos |
336,500 |
345,000 |
Musselwhite |
242,600 |
270,000 |
Porcupine |
273,100 |
265,000 |
Marlin |
382,400 |
210,000 |
Alumbrera
(37.5%) |
133,500 |
140,000 |
Pueblo Viejo |
0 |
85,000 |
El Sauzal |
100,500 |
80,000 |
Marigold (66.7%) |
102,500 |
75,000 |
Wharf |
67,500 |
55,000 |
Total |
2,514,700 |
2,600,000 |
Canada
At Red Lake, production is expected to benefit
from an increase in tonnes mined from lower-grade zones consistent
with the Company's long-term initiative to utilize excess milling
capacity. The focus in the year ahead will remain on
enhancing the overall flexibility of the High Grade Zone (HGZ)
through continued investments in development.
Construction of the 5-kilometre haulage drift to
connect the Cochenour shaft with the Red Lake mine on the 5400 foot
level has advanced to a completion level of more than 36% at the
end of 2011 and targeted for 66% completion by year-end 2012.
Upon completion, the drift will enable ore from the Cochenour/Bruce
Channel deposit to be hauled directly to the Red Lake mine for
processing at the existing mill facilities. Forecast
life-of-mine gold production from Cochenour is approximately
250,000 to 275,000 ounces per year at low cash costs commencing
near the end of 2014. During 2012, exploration drilling from
the haulage drift will continue to test the unexplored ground at
depth in the heart of the prolific Red Lake gold district.
At Porcupine in Ontario, the Hoyle Pond Deep
project continued advancing toward shaft sinking in the first
quarter of 2012 in an effort to target newly discovered zones of
gold mineralization. Exploration at Hoyle Pond remains focused on
lateral and depth extension of current mineralized zones, as well
as expansion of the TVZ zone. This zone has been successfully
extended up-dip and remains open at depth and to the east.
Seven drills on surface continued to intercept mineralized zones
similar to those found at depth with positive results throughout
2011. The Company also announced today approval for the
Hollinger open pit project near the Porcupine complex in
Timmins. The $75 million
construction phase for the project has begun and will continue for
a period of 12-18 months, with initial focus on equipment
procurement, installation of the dewatering system, site clearing,
and development of the five-kilometre haulage road between the
Hollinger site and the Dome mill. The mine is expected to
begin production in the third quarter of 2012.
At Musselwhite in Ontario, increased production
in 2012 will be driven by increasing grades in the PQ Deeps.
Exploration drilling continued to focus on the underground
extension of both the Lynx zone discovery and PQ Deeps
resources. The Lynx resource has been extended 200 metres
north and 100 metres to the south of the resource boundary, with
mineralization open along strike and up- and down-dip.
Underground drilling in the PQ Deeps has extended the resource 200
metres north of the resource boundary and remains open along
strike. Surface drilling on the north shore of Opapamiskin
Lake continues to investigate the projection of the Lynx zone.
Upon reaching initial gold production in late
2014, Éléonore in Quebec will be a sustained source of large,
low-cost gold production in one of the most stable mining
jurisdictions in the world. A February
2011 pre-feasibility study update significantly expanded the
gold production profile through a development plan that will access
the Roberto deposit through two shafts and feed mill throughput of
7,000 tonnes per day. In November, the Environmental and
Social Impact Assessment permit was received, and full construction
is now well underway. Over 46,000 metres of surface diamond
drilling was completed in 2011 aimed at in-fill drilling in the
central portion of the ore body and to test high-grade results to
the north. The exploration ramp has now advanced 831 metres
in length, the completion of which will provide drilling locations
for further resource definition. The exploration shaft has
reached a depth of 640 metres with completion to a full 718 metre
depth targeted for the second quarter of 2012.
Mexico
At Peñasquito, both 50,000 tonne-per-day SAG
lines are routinely operating at capacity. During the month
of December throughput reached an average of 107,000 tonnes per day
and reached a new record of 140,000 tonnes on December 26. The supplemental ore feed
system to supply pebble feed to the 30,000 tonne-per-day high
pressure grinding roll (HPGR) circuit will be completed shortly and
hauling of additional material to the tailings dam walls is now
complete. Ramp-up to full 130,000 tonne-per-day design
throughput remains on track for the end of the first quarter of
2012. With mining progressing deeper into the heart of
the sulphide ore body, higher grades and throughput rates are
expected to drive a significant production increase in the year
ahead. With expected production of 425,000 ounces of gold,
Peñasquito is forecast to become Mexico's largest gold producer and
the Company's largest generator of cash flow in 2012.
Construction of an in-pit crushing and conveying
(IPCC) system is progressing well and commissioning of the system
is expected to commence in the second half of 2012. The IPCC
system will result in operating cost savings compared to truck
haulage.
During 2011, successful exploration and
development work continued at Camino Rojo, an advanced-stage
project near Peñasquito. Over 77,000 metres were drilled
during the year, including 132 resource expansion and in-fill core
holes, plus 38 condemnation holes in anticipation of site
facilities. Bulk samples have been shipped to Peñasquito for
metallurgical column tests and an updated resource block model has
now been completed. At Noche Buena, another advanced-stage
district project near Peñasquito, new exploration drilling has
confirmed structurally controlled higher grade mineralization
trends within the resource envelope. Follow-up drilling has
been planned in 2012 to in-fill and expand the resource along these
trends.
Los Filos mine in Guerrero state will continue
to be a major contributor to Goldcorp's overall production profile
in 2012. Gold production is forecast to increase slightly to
345,000 ounces. Exploration success continues to support the
potential for significant additions in gold reserves at Los Filos
over the longer term.
Central and South America
At Marlin in Guatemala, production in 2012 will
decline consistent with the planned transition to an exclusively
underground operation as mining in the primary open pit is now
complete. Stockpiled material with an average grade of
approximately 1.1 grams per tonne is expected to make up
approximately 40% of the mill feed at Marlin in 2012. The
development of recent high grade discoveries in the West Vero zone
will continue, with first production expected in the second half of
2012. Exploration success continues at the Delmy vein discovery
adjacent to current underground mining operations. Access to
the vein has been developed at three levels and two ventilation
raises to the surface have been completed. Mining of the Delmy
vein, which remains open along strike and at depth, began in late
2011 and is expected to contribute to Marlin production throughout
2012.
Gold production from Pueblo Viejo, the 40% owned
gold project in the Dominican Republic operated by Barrick, is
expected to contribute slightly to the Company's overall 2012
production profile starting in mid-2012, with a subsequent ramp-up
to a forecast annual average of 415,000 to 450,000 ounces of gold
in the first five years of full production at cash costs of less
than $350 per ounce. Project
construction is more than 85% complete following a delay caused by
damage to the partially constructed starter tailings dam facility
due to a heavy rainfall event in May
2011. Remediation of the starter tailings dam
continues to progress, with the joint venture in receipt of all
necessary approvals to allow construction of the dam to its full
height. As part of a longer-term, optimized power solution
for Pueblo Viejo, a plan is underway to build a dual-fuel
power plant at an additional cost to construct of approximately
$300 million (100%) to the joint
venture (or $120 million representing
Goldcorp's 40% share). The new plant is expected to provide
lower cost, longer term power to the project.
Following Pueblo Viejo, the high grade Cerro
Negro deposit is positioned to be the next source of new gold
production for the Company in 2013. The project includes
several high-grade veins located on the low-elevation Patagonian
plains of southern Argentina. With production expected to average
approximately 550,000 ounces of gold in its first five full years
of production, Cerro Negro is well-positioned as Goldcorp's next
cornerstone gold mine. The development plan for Cerro Negro
includes plant throughput of 4,000 tonnes per day and allows for
concurrent mining from multiple veins. With the December 2011 approval of the amended
Environmental Impact Assessment (EIA) by the Provincial authorities
in the Santa Cruz province, mining will initially take place in the
Eureka, Mariana Central and Mariana Norte veins. Development
of the Eureka vein continues to advance on schedule and development
of the Mariana Central and Mariana Norte veins has commenced.
The Company also announced today that the
Goldcorp Board of Directors has approved a decision to proceed with
construction of the El Morro copper-gold project in Chile.
Construction will commence in September, 2012 following the end of
winter and extend over a five-year period at a capital cost of
$3.9 billion. Development activities
in 2012 will include access road construction, engineering,
equipment procurement and exploration. Drilling will focus on
additional condemnation for site infrastructure and testing
potential extensions of the La Fortuna deposit. Initial
production is expected in 2017 with full production expected in
2018. Over its 17-year mine life, El Morro is expected to
produce an average of over 210,000 ounces of gold and 200 million
pounds of copper per year to Goldcorp's account. Life-of-mine
cash costs are expected to be approximately ($700) per ounce of gold on a by-product basis
and approximately $550 per ounce of
gold on a co-product basis. Metals price assumptions used to
calculate average life-of-mine El Morro cash costs are $1,200 per ounce of gold and $2.75 per pound of copper.
The El Morro project is located in the Huasco
Province, Atacama region of northern Chile, approximately 800 km
north of Santiago. The project currently comprises mining and
milling of sulphide copper and gold ore from the La Fortuna mineral
deposit. Current open pit proven and probable mineral
reserves on a 100% basis total 537 million tonnes at 0.52% copper
and 0.49 grams per tonne gold (6.1 billion pounds copper and 8.4
million ounces gold) and will support a 90,000 tonne-per-day
concentrator. Plant design includes a crushing plant,
semi-autogenous grinding (SAG) circuit, rougher flotation and
regrind circuit, and cleaner and scavenger flotation banks.
Additional project-related infrastructure includes a desalination
plant, power plant and concentrate filtration plant. The
construction of a new access route to the Pan American highway from
the project is also planned. This access route will also
serve as the concentrate and water pipeline route, and the
preferred location for the project power line. Water supply is
planned to be sourced from a reverse-osmosis desalination plant, to
be constructed approximately 60 kilometres north of Huasco.
The projected desalination plant will produce 740 litres per second
of agricultural-quality water, which will be conveyed to site along
a 193 kilometre-long water pipeline. Concentrate will be
transferred via pipeline to a concentrate filter plant at the port
site for overseas shipment.
Financial Guidance
An estimated $1.7
billion in cash at year-end, an undrawn $2 billion credit facility and continuing strong
cash flows in 2012 are expected to provide the necessary
flexibility to fund the Company's peer-leading growth profile.
Goldcorp will invest aggressively in 2012 to
fund its suite of growth projects, with capital expenditures for
2012 forecast at approximately $2.6
billion of which approximately 60% is allocated to projects
and 40% for operations. Major project capital expenditures in
2012 include approximately $500
million at Cerro Negro, $400
million at Éléonore, $350
million at Pueblo Viejo, and $185
million at El Morro.
Spurred by significant exploration successes in
and around many of its key properties, company-wide exploration
expenditures in 2012 are expected to total approximately
$200 million, of which approximately
one third will be expensed. Goldcorp's primary focus will
remain on the replacement of reserves mined throughout the year and
on extending existing gold zones at all of its prospective mines
and projects. In addition, investments will be made in
enhancing the Company's early-stage exploration pipeline.
General and administrative expense is forecast at $160 million which excludes stock option expense
estimated to be $90 million for the
year. Depreciation, depletion and amortization expense is expected
to be approximately $325 per ounce of
gold sold subject to the Company finalizing its year-end 2011
reserve and resource calculation. The Company expects an
overall effective tax rate of 30% for 2012.
Five Year Forecast
Goldcorp's production profile continues to
evolve toward a model comprised of sustained, low-cost gold
production from large cornerstone projects. Gold production
is forecast to grow approximately 70% over the next five years to
4.2 million ounces in 2016. New projects will make
significant contributions to this growth, with first gold
production forecast from new projects as follows: Pueblo Viejo,
mid-2012; Cerro Negro, second-half 2013; Cochenour, late 2014;
Camino Rojo, 2014; Éléonore, late 2014; and El Morro, 2017.
Year-by-year gold production is forecast as follows:
Year |
Forecast Gold Production |
2012 |
2.6 Million ounces |
2013 |
3.2 Million ounces |
2014 |
3.8 Million ounces |
2015 |
4.0 Million ounces |
2016 |
4.2 Million ounces |
At metals prices of $26 per ounce silver, $3.30 per pound copper, $0.90 per pound zinc and $0.90 per pound lead, average by-product cash
costs over the five-year period are expected to remain below
$400 per ounce over the 5-year plan,
positioning the Company for outstanding, sustained margins and cash
flows over the long term.
Goldcorp is one of the world's fastest growing
senior gold producers. Its low-cost gold production is
located in safe jurisdictions in the Americas and remains 100%
unhedged.
The scientific and technical information
concerning Goldcorp's mineral properties contained herein is based
upon information prepared by or under the supervision of Maryse
Belanger, Vice President, Technical Services of Goldcorp who is a
"qualified person" within the meaning of National Instrument
43-101.
- The Company has included a non-GAAP performance measure, total
cash cost per gold ounce, throughout this document. The Company
reports total cash costs on a sales basis. In the gold mining
industry, this is a common performance measure but does not have
any standardized meaning, and is a non-GAAP measure. The Company
follows the recommendations of the Gold Institute standard. The
Company believes that, in addition to conventional measures,
prepared in accordance with GAAP, certain investors use this
information to evaluate the Company's performance and ability to
generate cash flow. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with GAAP.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains "forward-looking
statements", within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation, concerning the business, operations and
financial performance and condition of Goldcorp Inc. ("Goldcorp").
Forward-looking statements include, but are not limited to,
statements with respect to the future price of gold, silver,
copper, lead and zinc, the estimation of mineral reserves and
resources, the realization of mineral reserve estimates, the timing
and amount of estimated future production, costs of production,
capital expenditures, costs and timing of the development of new
deposits, success of exploration activities, permitting time lines,
hedging practices, currency exchange rate fluctuations,
requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated reclamation
expenses, timing and possible outcome of pending litigation, title
disputes or claims and limitations on insurance coverage.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans", "expects",
"is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", "believes" or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved" or the negative connotation thereof.
Forward-looking statements are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performances or achievements of
Goldcorp to be materially different from future results,
performances or achievements expressed or implied by such
statements. Such statements and information are based on
numerous assumptions regarding present and future business
strategies and the environment in which Goldcorp will operate in
the future, including the price of gold, anticipated costs and
ability to achieve goals. Certain important factors that could
cause actual results, performances or achievements to differ
materially from those in the forward-looking statements include,
among others, gold price volatility, discrepancies between actual
and estimated production, mineral reserves and resources and
metallurgical recoveries, mining operational and development risks,
litigation risks, regulatory restrictions (including environmental
regulatory restrictions and liability), activities by governmental
authorities (including changes in taxation), currency fluctuations,
the speculative nature of gold exploration, the global economic
climate, dilution, share price volatility, competition, loss of key
employees, additional funding requirements and defective title to
mineral claims or property. Although Goldcorp has attempted
to identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended.
Forward-looking statements are subject to known
and unknown risks, uncertainties and other important factors that
may cause the actual results, level of activity, performance or
achievements of Goldcorp to be materially different from those
expressed or implied by such forward-looking statements, including
but not limited to: risks related to the integration of
acquisitions; risks related to international operations, including
economical and political instability in foreign jurisdictions in
which Goldcorp operates; risks related to current global financial
conditions; risks related to joint venture operations; actual
results of current exploration activities; environmental risks;
future prices of gold, silver, copper, lead and zinc; possible
variations in ore reserves, grade or recovery rates; mine
development and operating risks; accidents, labour disputes and
other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of
development or construction activities; risks related to
indebtedness and the service of such indebtedness, as well as those
factors discussed in the section entitled "Description of the
Business - Risk Factors" in Goldcorp's annual information form for
the year ended December 31, 2010
available at www.sedar.com. Although Goldcorp has attempted
to identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements.
Forward-looking statements are made as of the date hereof and
accordingly are subject to change after such date. Except as
otherwise indicated by Goldcorp, these statements do not reflect
the potential impact of any non-recurring or other special items or
of any dispositions, monetizations, mergers, acquisitions, other
business combinations or other transactions that may be announced
or that may occur after the date hereof. Forward-looking
statements are provided for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to get a better understanding of our operating
environment. Goldcorp does not undertake to update any
forward-looking statements that are included in this document,
except in accordance with applicable securities laws.
SOURCE Goldcorp Inc.